Fixed Deposit

Fixed deposit, also known as term deposit is a financial investment instrument provided by banks and financial institutions. Investor deposits a certain sum of money and gains fixed interest for the tenure of the deposit. Investors, who are conservative and want guaranteed return, prefer to opt for Fixed deposit investments. Fixed deposit is a safe, quick and easy investment option. Rate of interest paid on fixed deposit varies depending on the amount and tenure.

Factors to consider before investing in Fixed Deposit

Don’t invest all your investment with the single provider. It will help you to avoid breaking one entire deposit in case of emergency situations. You can save on premature withdrawal penalty, as it will be paid for a smaller amount.

Select right tenure for your investment in Fixed Deposit schemes. Different tenure may have different interest rate on investment. Also, selecting right tenure as per your financial requirement may assist you to avoid premature withdrawal and save money on withdrawal penalty and interest return on investment.

The income earned on the deposit by the individual on their spouse and kids shall get clubbed with individual’s tax purpose.

Fixed Deposits Benefits

Assured Returns: Fixed deposit provide assured and guaranteed return on investment. Fixed Deposit are not a risky investment as they do not depend on the market fluctuation. In short, market volatility doesn’t impact or influence the paid returns on Fixed Deposit.

Flexi-Tenure: Investors can plan and decide tenure for Fixed Deposit depending on their futuristic financial requirement. Tenure of Fixed Deposit can be of 1 month or 1 year or 5 years or 10 years.

Good Rate of Return: Rate of interest offered on fixed deposits are higher than that on saving account.

Interest rate Pay-outs: One can decide the intervals on the chosen term at which he/she wants interest to be paid. Interest rates pay-out are provided at monthly, annually or maturity. Investors normally opt for Monthly or Annually interest rate pay-out.

Withdraw Condition: Invested amount in Fixed deposit can be partially or completely withdrawn with minor penalty. Investor may lose a certain interest component of the income on Fixed deposit and withdraw its investment.